Kalamazoo advances $1bn capital plan with 2026 rate increases

Kalamazoo advances $1bn capital plan with 2026 rate increasesThe Michigan city approved steady rate hikes to support a six-year infrastructure overhaul, targeting pipe replacement and biosolids management while leveraging significant grant funding.

The City Commission approved rate adjustments effective January 1, 2026, to support a $1 billion capital improvement program over the next six years.

Water rates are projected to increase 5–7% annually, while wastewater rates will rise 7–9% annually.

Capital priorities include lead and cast iron pipe replacement, central water treatment plant upgrades, and wastewater odor and resiliency improvements.

The city has secured $43.5 million in infrastructure grants to help offset costs for its regional system, which serves up to 22 communities.

Operational approvals included a $1.35 million contract extension for biosolids dewatering polymer and $476,400 for treatment plant design work.

The City of Kalamazoo, Michigan, has approved water and wastewater rate increases effective January 1, 2026, as the municipality mobilizes a $1 billion capital improvement program (CIP) spanning the next six years. The City Commission voted to adopt the new rate structures following a presentation by Director Baker, who outlined the necessity of the revenue adjustments to maintain infrastructure integrity and regulatory compliance. According to Director Baker, the utility is targeting an annual increase of approximately 5–7% for drinking water and 7–9% for wastewater services. For the average customer, this translates to a combined monthly increase of roughly $5. The revenue is earmarked for critical infrastructure projects, including an aggressive lead service line replacement program, the removal of aging cast iron pipes, and reliability improvements at the water treatment plant. The wastewater sector is also undergoing significant modernization. During the meeting, Commissioner Pradel highlighted innovative solutions within the CIP, specifically pointing to a transition toward a new dryer solution for sludge management. This technology is expected to replace the current practice of hauling sludge via trucks, which costs ratepayers between $13 million and $15 million annually, thereby reducing long-term operational costs and environmental impact. To mitigate the financial burden on ratepayers, the utility has aggressively pursued outside funding, securing $43.5 million in infrastructure grants over the last few years. The system serves a regional customer base beyond the city limits, providing drinking water to 11 communities and wastewater services to 22 communities. Alongside the rate adoption, the Commission approved several immediate contract actions supporting the utility's capital and operational goals. These included a contract supplemental with Tetra Tech, Inc. for the Central Water Treatment Plant Upgrades Project design valued at $476,400. Tetra Tech maintains six offices across Michigan to support the Great Lakes region, having previously worked on water and sewer infrastructure in Ypsilanti. Additionally, the Commission approved a $1.35 million contract extension with Solenis LLC for biosolids dewatering polymer and authorized the purchase of 350 mechanical filtration units and replacement cartridges from Gordon Water Systems for $588,959, further supporting potable water quality efforts.